State Pension pay increase in April could make older Brits pay more tax in retirement

April will see pensioners benefit from a 4.1 per cent increase in the New and Basic State Pensions, with additional components also rising by 1.7 per cent. This is due to the Triple Lock mechanism, which causes state pensions to rise yearly by either: May to July's average wage growth, September's CPI, or a minimum of 2.5 per cent—whichever is highest.

Despite recent disinformation on social media that HMRC has warned of "£130 deduction to the monthly State Pension", millions of pensioners will see their incomes increase in just a few months. This is because the Labour Government has committed to maintaining the Triple Lock for the next parliamentary term.

As for everyone else, the Personal Allowance stays frozen at £12,570 until the start of the fiscal year 2028/29. With the full New State Pension set at £11,502 annually for this year, recipients can anticipate an increase to £11,973 from April.

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Before hitting this year’s taxable income threshold, individuals with the full New State Pension still have a £1,068 leeway, which narrows down to £597 the following year. It's important to clarify that full New State Pension beneficiaries don't pay income tax on their pension. Nevertheless, retirees with extra income from employment or other private pensions may be taxed accordingly.

Most people settle taxes through PAYE for employment and private pension taxation, yet those who aren't taxed automatically will receive a tax bill from HMRC during the summer, which they'll have to clear by the next January, as reported by the Daily Record.

There's been considerable speculation about the number of pensioners who will be taxed, but currently,